So the new modus operandi on this site seems to be - start your own post rather than add on to an existing one on the same topic. Fine. I'll do so rather than add on to
Real world -- in sequence
United Technologies (UTX) spun off Carrier (CARR) and Otis (OTIS), then merged as equals with Raytheon (RTN), then renamed the new combination Raytheon Technologies (RTX). This series seems to have confused a number of users, so I thought I might share my approach. I doing so I further note that there are a lot of flexibility in Quicken and it need not be a one size fits all solution. What I have done fits me. YMMV.
I should note here that I was a current shareholder of Raytheon and a former shareholder of United Technologies at the time of this spinoff-merger sequence.
I'll further note that for this purpose, I am relying on the Form 8937 published by RTX applicable to the two spinoffs. (ref:
https://investors.rtx.com/shareowner-services/merger-related-resources) In that document, RTX puts forth fair market values of RTX, CARR and OTIS as $49.93, $16.92, and $47.32 per share, respectively based on the closing values on 4/3/2020, immediately after the spinoffs took place. You or your broker may choose different values and thus achieve slightly different ending values.
One more note, I am using the Quicken Windows subscription version, current release.
Point 1: UTX spins off two other companies - CARR and OTIS. Quicken provides a macro-transction (aka wizard) for corporate spinoffs, but it addresses directly only one company being spunoff. But it turns out, because of the fixes implemented to the spinoff action in recent years, with proper use the spinoff macro-transaction can be applied for multiple spinoffs. That is what I would do and did in a test file.
I first spunoff OTIS from UTX. The shareholder received 0.5 shares of OTIS with a FMV of 47.32/share for every share of UTX held. The corresponding value of remaining part of UTX would have been 49.93 (UTX value) plus 16.92 (CARR value) or $66.85. Parameters for the first spinoff --
Enter Transactions Corporate Spinoff
Transaction date = 4/3/2020
Security Name = United Technologies (however you had it named)
New Company = Otis (however you choose to name it)
New Shares Issued = 0.5
Cost per Old Share = $66.85
Cost per New Share = $47.32
I then spun off CARR
Enter Transactions Corporate Spinoff
Transaction date = 4/3/2020
Security Name = United Technologies (however you had it named)
New Company = Carrier (however you choose to name it)
New Shares Issued = 1.0
Cost per Old Share = $49.93
Cost per New Share = $16.92
The first series allocated 26.14% of the original UTX basis to the new OTIS holding with the balance of the basis staying with UTX. The second series split the remaining basis between the CARR and UTX matching the basis allocation presented in the Form 8937 -- 55.17% to UTX, 18.69% to CARR, and 26.14% to OTIS. Executing those two spinoffs consecutively on the same date did not create any issues in Quicken as far as I could tell. The program properly managed the changes from the first spinoff when applying the second spinoff.
Those two series create a sequence with respect to UTX of REMOVE SHARES, ADD SHARES, REMOVE SHARES, and ADD SHARES. As the two intermediate are actually extraneous in the end, I chose to delete those sets. The final set of transactions in my file were
REMOVE SHARE of UTX
ADD SHARES of OTIS (one per lot of the original UTX holding)
ADD SHARES of CARRIER (one per lot of the original UTX holding)
ADD SHARES of UTX (one per lot of the original UTX holding)
Perhaps you or your broker chose different fair market values for determining the cost basis allocation. You can certainly do as I did above with your established fair market values, or you can simply use the Form 8937 values and then edit each final ADD SHARES transaction to reflect the applicable cost basis for that lot of that company as determined by your broker. That is one of the positive benefits to Quicken's new algorithm for spinoffs (an algorithm I strongly encouraged them to adopt).
With two "Corporate Spinoff" macro-transactions you have now achieved the necessary spinoffs of Carrier and Otis.
Point 2: Raytheon and United Technologies merge as equals. As a former and not current shareholder of UTX, I chose a non-standard approach here. I wanted to leave my 10-year old historical transactions with United Technologies in tact as they were originally recorded. Therefore, I chose to Edit the security details for UTX by
a) adding a note in the details about the merger into Raytheon Tech in April, 2020, and
b) changing the ticker from "UTX" to "UTX(old)".
In making that ticker change, I chose the options of copying the prices from UTX to UTX(old), and deleting the price history associated with UTX. That way I preserved the price history, but if a future company chooses the UTX ticker some time down the line, my Quicken file will not get entangled by the duplication.
With that approach taken, I then created a new security for Raytheon Technologies (RTX) and proceeded with a standard Corporate Acquisition whereby RTX acquired RTN using the 2.3348 share ratio. As the original Raytheon was then a non-existing company, I retickered it in the same manner I had with UTX -- RTN became RTN(old).
The more normal approach would have been to have UTX acquire RTN (Corporate Acquisition) and then rename UTX to Raytheon Tech (Edit Security Details or Corporate Name Change), and then reticker that security to RTX.
Point 3: By whatever approach you took, you may have fractional shares of RTX or OTIS at that point. Those fractional shares should be sold for the cash-in-lieu amount you received instead of receiving the actual fractional shares.
Further note: If you downloaded transactions from your brokerage, those are likely to not have the correct cost basis information and may be lacking accuracy about individual lots. I would delete any such transactions.
Be sure to create a backup of your data file before venturing into this perhaps new territory.
At the risk of being accused of spamming this site, I am going to post a link this this discussion in those posts cited above. I will choose not to respond in those others posts, so if you want my thoughts, post your questions to me here.
